The demand in the textile and clothing industry is mainly driven by domestic demand, while exports are relatively weak.

    Data shows that the textile, clothing, footwear and hat industry has experienced a significant recovery this year.
    According to data from the National Bureau of Statistics, from January to May this year, the total retail sales of consumer goods reached 18.8 trillion yuan, a year-on-year increase of 9.3%. According to consumption types, from January to May this year, retail sales of goods reached 16.8 trillion yuan, a year-on-year increase of 7.9%; The catering revenue is about 2 trillion yuan, an increase of 22.6%.
    From the perspective of retail sales of units above the designated size, the top three categories of cumulative growth from January to May were gold and silver jewelry, clothing, shoes and hats, needle textiles, and Chinese and Western medicine, with cumulative growth rates of 19.5%, 14.1%, and 12%, respectively.
    Image source: screenshot of the official website of the National Bureau of Statistics
    However, it is worth noting that from the demand side, the demand in the textile and clothing industry in the first half of the year was mainly driven by domestic demand, while exports were relatively weak.
    According to customs data cited by the China Textile Industry Federation, in the first half of this year, China's textile and clothing exports reached 142.68 billion US dollars, a year-on-year decrease of 8.3% (a year-on-year decrease of 1.9% in RMB), an increase of 1.6 percentage points compared to the first quarter. Among them, textile exports reached 67.7 billion US dollars, a year-on-year decrease of 10.9% (a year-on-year decrease of 4.5% in RMB); Clothing exports reached 74.98 billion US dollars, a year-on-year decrease of 5.9% (a year-on-year increase of 0.7% in RMB).
    Regarding the weakness of overseas demand, Zhejiang Securities analyzed in its research report that overseas inventory clearance has continued for nearly a year, and channel pressure has significantly reduced as of April 2023. From the perspective of inventory in retail and wholesale channels in the United States, it reached its peak in July 2022, and since then, various brands have started to clear inventory. Although the overall growth rate of clothing inventory in the United States has not yet fully matched the growth rate of terminal retail, the gap continues to narrow, and the pressure on channel inventory is decreasing. According to the latest publicly available data (April 2023 data), inventory growth was only 9% year-on-year.